UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) August 6, 2005
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Ovation Products Corporation
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(Exact Name of Registrant as Specified in Its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
000-51145 02-0510323
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(Commission File Number) (IRS Employer Identification No.)
395 East Dunstable Road
Nashua, New Hampshire 03062
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(Address of Principal Executive Offices) (Zip Code)
(603) 891-3224
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(Registrant's Telephone Number, Including Area Code)
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
|_| Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01 Entry into a Material Definitive Agreement
Agreement with INSEQ Corporation
On August 8, 2005, Ovation Product Corporation entered into a letter
agreement with INSEQ Corporation, an affiliate corporation of GreenShift
Corporation (OTC Bulletin Board: "GSHF"). GreenShift Corporation agreed on
August 6, 2005, to purchase 200,000 shares of our common stock over a four month
period beginning on August 30, 2005, for an aggregate purchase price of $1
million.
The letter agreement provides, among other things, that in the event
that we desire to contract with outside contractors to manufacture our Clean
Water Appliances, our proprietary compact stand-alone distiller units, or
certain components of our Clear Water Appliances, we will be required to engage
INSEQ to manufacture the units or components if the terms of its proposal are at
least as commercially favorable to us as any competing proposal we receive. The
letter agreement further provides that INSEQ will provide us with certain
prototype manufacturing services at cost. The right of first refusal granted to
INSEQ will terminate on December 31, 2007.
Agreement with GreenShift Industrial Design Corporation
On August 9, 2005, we entered into a license agreement with GreenShift
Industrial Design Corporation ("GreenShift Industrial"), a wholly-owned
subsidiary of GreenShift Corporation. GreenShift Industrial focuses on the
engineering and marketing of environmentally sensitive innovations and processes
that enhance manufacturing efficiencies, improve resource utilization and
minimize waste.
Under the license agreement, we agreed to grant GreenShift Industrial
certain exclusive and non-exclusive licenses to use our new patented and
patent-pending implementations of a vapor compression water distillate process
and our Clean Water Appliance (the "Technology") for certain applications of
GreenShift Industrial identified in the agreement.
Pursuant to the license agreement, GreenShift Industrial may develop,
invent, make or have made, use, promote, distribute, sell and sublicense the
Technology and any development or improvements thereto for the applications
detailed in the agreement. The right to sublicense the Technology is limited to
sublicenses to "portfolios companies" and affiliates of GreenShift Corporation
and only for so long as they remain portfolio companies and affiliates. The term
"portfolio companies" is defined in the license agreement to include GreenShift
Corporation and any company in which GreenShift Industrial or GreenShift
Corporation owns more than 15% of the outstanding equity interests. In addition,
we have retained the right to directly sell products and/or provide services to
third parties for the applications of GreenShift Industrial that are subject to
the exclusive license, and we may enter into certain license or distribution
agreements with third parties in connection with these applications, provided
that in both cases, we will pay GreenShift Industrial royalty fees.
In consideration of the licenses granted, GreenShift Industrial agreed
to pay Ovation a royalty fee equal to 1% of service revenues or product sale
revenues, or 20% of license revenue deriving from the use or license by
GreenShift Industrial of the Technology and any development of and improvements
to the Technology. The license agreement further provides for an additional
license fee if GreenShift Industrial manufactures related equipment at its own
expense. We also have a right of first refusal to engineer units based on the
licenses for GreenShift Industrial. GreenShift Industrial is obligated to remit
royalty fees under the agreement when cash flow permits but no less frequently
than annually.
Under the license agreement, title and ownership of the Technology is
retained by Ovation. GreenShift Industrial has agreed to protect and maintain
the confidentiality of the information related to the Technology for the term of
the agreement and five years thereafter.
The license agreement has a five year term unless terminated earlier
pursuant to its terms, including at any time at the sole discretion of
GreenShift Industrial. Ovation may terminate the license with respect to each
application of GreenShift Industrial set forth in the agreement, upon at least
90 days prior notice, if during 2008 or any year thereafter GreenShift fails to
generate more than $100,000 in revenue from such application deriving from the
use of the Technology.
Item 3.02 Unregistered Sales of Equity Securities
On August 6, 2005, Ovation Products Corporation entered into agreements
with GreenShift Corporation, pursuant to which GreenShift Corporation will
purchase 200,000 shares of our common stock over a period of four months
beginning on August 30, 2005, for an aggregate purchase price of $1 million. The
agreements further provide that for each share of common stock issued,
GreenShift will receive warrants to purchase two shares of our common stock,
exercisable over a period of five years, at an exercise price of $6.00 per
share. The agreement also permits GreenShift Corporation to designate a nominee
for election to Ovation's Board of Directors.
The offer and sale of these securities were made as part of a private
placement of our common stock and were exempt from the registration requirements
of Section 5 of the Securities Act, as amended, pursuant to Section 4(2) of the
Securities Act and Rule 506 of Regulation D thereunder. We relied on the
following facts in determining that the offer and sale of these securities as
part of our private placement qualify for the exemption provided by Rule 506:
o The offer and sale satisfied the terms and conditions of Rule
501 and 502 under the Securities Act; and
o Pursuant to Rule 506 under the Securities Act, no more than 35
purchasers purchased our securities from us under the offer,
as determined in accordance with Rule 501(e) under the
Securities Act.
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: August 11, 2005 Ovation Products Corporation
By: /s/ Robert MacDonald
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Name: Robert MacDonald
Title: Chief Executive Officer